One year later: Bear-market bottom's best and worst stocks

Top performers are a recovery story from going-bust scenarios

By

KateGibson

NEW YORK (MarketWatch) -- The U.S. stock market has gained 68% since the 17-month bear market hit its bottom just under a year ago, making winners out of a group of onetime basement-dwelling stocks and losers out of others.

Bank stocks climb from abyss
Vanishing fears about nationalization and liquidation helped bank stocks
more than double in past year. But the sector's still on fragile ground.

While reasons for the losing stocks are individual, with some companies simply battered by rivals, the top performers on the S&P 500 Index
SPX, -0.07%
in the last year all have one thing in common: Their shares have collectively rebounded since the benchmark hit its March 9, 2009 closing low, as concerns abated over their prospects for survival.

"The lows in all five of these names were pricing in a credible possibility of bankruptcy, so the percentage moves are exaggerated. There's a massive swing if a company facing going out of business then actually makes it," said Art Hogan, chief market strategist at Jefferies & Co.

Top performers in past 12 months

Genworth Financial Inc.GNW, -1.78%,
up 1,701% at $16.39. Within a year of going public in the spring of 2004, shares of the mortgage insurer rose above $30 -- a level maintained until the financial crisis struck in October 2007. Hammered by losses from the housing-market collapse, shares of Genworth dived to a closing low of 91 cents on March 9, 2009. After accumulating more than $2 billion in investment losses during the turmoil, Genworth cut costs and shored up its balance sheet, returning to the black for the third and fourth quarters. Genworth earlier this month said it expects losses in the mortgage-insurance business to peak in the middle of this year.

Office Depot Inc.ODP, +1.20%,
up 915.1% at $7.41. Shares of the country's third-biggest seller of office supplies were trading at about $20 a share as the bear market took hold in October 2007. Pummeled by Wall Street's meltdown, they closed at 59 cents apiece on March 9, 2009, as investors asked, "Do we need an Office Depot when we already have OfficeMax
OMXS30, +0.84%
and Staples
SPLS
? Plus, they had too much debt and too many stores," recalls Hogan. The company, which has cut jobs and suspended its dividend to cut costs, reported a loss in the fourth quarter but still beat forecasts, pushing its stock back above the $7 level.

Fifth Third BancorpFITB, +1.25%,
up 829.2% at $12.73. Shares of the regional bank not fallen under $40 for a half a dozen years before Wall Street began breaking down. The shares dove to a March 9, 2009, closing at a low of $1.39, as investors questioned the depth of the toxic assets on the financial sector's books. The Cincinnati-based bank in January reported a fourth-quarter net loss of $160 million, less than the market had expected, and helping propel the price of its shares back above $12.

S&P 500
Best and Worst Performers
Past 12 months

Best
performers

change
(%)

worst
performers

change
(%)

1.

Genworth Financial

+1,701

MetroPCS Communications

-55

2.

Office Depot

+915

GameStop

-23

3.

Fifth Third Bancorp

+829

Dean Foods

-16

4.

Wyndham Worldwide

+695

MEMC Electronic Materials

-9

5.

Gannett

+671

Apollo Group

-7

Wyndham Worldwide Corp.WYN, -1.74%,
up 695% at $24.01%. Slammed as the economic crisis and resulting recession prompted consumers and business travelers to cut back on travel, the lodging company saw its shares drop to a March 9, 2009, close of $3.10 a share. In February it posted a better-than-expected profit and tripled its dividend to 12 cents. "These guys were long everything nobody wanted, and that was real estate," commented Hogan of Wyndham's plight during the bear market.

Gannett Co.GCI, +0.84%,
up 671.1% at $16.27. The newspaper chain's shares traded in the $70 to- 80 range for eight years before the recession curbed spending on advertising, adding to investor worries about the viability of the newspaper business. Print media, already under major pressure as consumers turned to the Internet for free content, got slammed. Gannett shares declined to just under $2 as the market bottomed. The publisher of USA Today managed to stay profitable in the fourth quarter, largely by slashing expenses.

Worst performers

MetroPCS Communications Inc.PCS,
down 54.9% at $6.38. MetroPCS shares fell 29% on Aug. 6 when the provider of prepaid cell-phone service reported a 48% drop in second-quarter profit. It's having a tough time keeping up with bigger rivals AT&T Inc.
T, -1.22%
and Verizon Communications Inc.
VZ, -0.78%
and hanging on to customers when they find a cheaper plan. Its chief executive has promised more discounts if necessary.

GameStop Corp.GME, -3.71%,
down 22.9% at $18.08. Illustrating its ongoing trouble, shares of GameStop fell 7.2% on a single day in late February following the unexpected departure of its chief financial officer after just six months on the job. Disappointing holiday sales also added to the video-game retailer's woes.

Dean Foods Co.DF, -14.05%,
down 16.4% at $16. Shares of the country's largest dairy company fell nearly 14% in a single session last month after Dean reported quarterly results that missed even the company's own expectations. Rising commodity prices are another factor pressuring the company.

MEMC Electronic Materials Inc.WFR,
down 8.9% at $12.90. Its business hurt by a decline in silicon prices, the maker of wafers for semiconductors and silicon for solar cells took a 15% hit to its stock on one day in February, after it posted a quarterly loss and forecast 2010 earnings under what the market was anticipating.

Apollo Group Inc.APOL, +0.00%,
off 6.6% at $62.39. The education company in February reported results under Wall Street's expectations and said bad debt expense would be higher than usual. The disappointing report further weighed on Apollo's stock, already hard hit by an informal review of its accounting practices and other regulatory concerns. At the beginning of the crisis, for-profit education companies found favor with investors on anticipation people would want to learn new skills in a recession. "Apollo seems to be the least favorite of the group, while the rest continue to profit on this play," according to Hogan.

Company

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